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Frequently Asked Questions Pay & Leave

Recruitment, Relocation and Retention Incentives

Before paying a retention incentive, an agency must establish a plan for using the authority. (See 5 CFR 575.307 and 575.315(c).) The plan must include the designation of officials with authority to review and approve payment of retention incentives, the categories of employees who are prohibited from receiving retention incentives, required documentation for determining that an employee would be likely to leave the Federal service or would be likely to leave for a different position in the Federal service, any requirements for determining the amount of a retention incentive, the payment methods that may be authorized, requirements governing service agreements (including the criteria for determining the length of a service period, the conditions for terminating a service agreement, and the obligations of the agency if it terminates a service agreement), the conditions for terminating retention incentive payments when no service agreement is required, and documentation and recordkeeping requirements.

Agencies may not pay a retention incentive to an employee in a position (1) to which the individual was appointed by the President; (2) in the Senior Executive Service as a non-career appointee; (3) which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character; (4) designated as the head of an agency, including an agency headed by a collegial body composed of two or more individual members; or (5) in which the employee is expected to receive an appointment as the head of an agency. (See 5 CFR 575.304 and 575.315(b)(1).)

An agency may pay a recruitment or relocation incentive as an initial lump-sum payment at the beginning of the service period, in equal or variable installment payments throughout the service period, as a final lump-sum payment upon completion of the service period, or in a combination of these methods. (See 5 CFR 575.109(a) and 575.209(a).)

For each determination to pay a recruitment or relocation incentive, an agency must document in writing—

The basis for determining that a position is likely to be difficult to fill;

The basis for authorizing an incentive; and

The basis for the amount and timing of the approved incentive payment and the length of the required service period.

Also, for a relocation incentive, that the worksite of the employees new position is not in the same geographic area as the worksite of the position held immediately before the move (or that a waiver was approved under 5 CFR 575.205(b)) and that the employee established a residence in the new geographic area.

The authorized agency official must review and approve the recruitment or relocation incentive determination before the agency pays the incentive to the employee. (See 5 CFR 575.108(a) and 575.208(a).)

For each determination to pay a retention incentive for an employee likely to leave the Federal service, an agency must document in writing-

The basis for determining that the unusually high or unique qualifications of the employee (or group of employees) or a special need of the agency for the employee’s (or group of employees') services makes it essential to retain the employee(s);

The basis for determining that the employee (or a significant number of employees in a group) would be likely to leave the Federal service in the absence of a retention incentive; and

The basis for establishing the amount and timing of the approved retention incentive payment and the length of the required service period.

Under OPM regulations (5 CFR 575.307(b)), an agency official who is at least one level higher than the employee’s (or group of employees‘) supervisor must review and approve each determination to pay a retention incentive to an individual or group of employees, unless there is no official at a higher level in the agency. A higher level approval is not needed when approving coverage of individual employees under a previously approved group retention incentive authorization. The authorized agency official must review and approve the retention incentive determination before the agency pays the incentive to the employee.
We encourage agencies to delegate authority to approve retention incentives to the lowest level practicable to help respond more effectively to their staffing needs.

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